The ridiculous wasteful Cash for Clunkers program isn’t the only example of an industry destroying inventory with the end result ultimately being higher prices for consumers.
According to Bloomberg News, US dairies will remove 86,710 cows from their herds to be sold to slaughterhouses as part of an industry-funded program intended to boost milk prices by curbing output.
“The buyout is the third such cull in nine months, the Arlington, Virginia-based National Milk Producers Federation said today in a statement,” Bloomberg reported. “The most recent buyout completed last month involved 101,000 cows, the most ever for the groups so-called Cooperatives Working Together program, which began in 2003.”
A key difference between “Cash for Cows” and Cash for Clunkers is that the animals will go to the slaughterhouse, rather than simply being left to rot, which would be the equivalent of what’s happening to older vehicles under Cash for Clunkers.
Perhaps the difference lies in the fact that while the government initiated Cash for Clunkers, the cow culling is an industry-funded operation.
So far there’s been little public notice of the dairy farmers’ decision, but that may change when milk prices start to rise. However, the likely extra cost for a gallon of milk is going to pale in comparison, relatively speaking, to the rise in used car prices that’s coming, thanks to Cash for Clunkers.
As the South Carolina Policy Council recently reported, Cash for Clunkers will hurt lower- and middle-class South Carolinians seeking used cars down the road.
That’s because car dealerships in the Palmetto State have reported that used car prices are already extremely high because of a diminished supply of both new and used cars.
“In fact, some used car prices are close to that of new cars,” the Policy Council writes. “Which therefore begs the question: why are we destroying perfectly drivable cars when the used car prices are so high? In simple economics, when price is high, it is unwise to decrease supply – that will only drive up cost to the consumer.”
It’s simple economics: When you cut supply, prices rise.
But no one seems interested in the reality that folks looking for used cars a year or more into the future are going to find fewer vehicles in their price range because so many “clunkers” have been destroyed.
The Coyote Blog asks an interesting question while commenting on the above: Can you imagine the reaction from both the public and Congress if the American oil industry destroyed inventory to raise prices?
Researchers are in the midst of a three-week research expedition off the coast of North Carolina to study World War II shipwrecks sunk in 1942 in what’s called the “Graveyard of the Atlantic.”
The region includes wrecks from US and British naval fleets, merchant ships and German U-boats, all sunk in the early part of World War II.
“The information collected during this expedition will help us better understand and document this often lost chapter of America’s maritime history and its significance to the nation,” said David W. Alberg, expedition leader and superintendent of the USS Monitor National Marine Sanctuary, according to LiveScience.
The expedition, which runs through Aug. 24, will also help document the condition of these vessels some 67 years after they were lost during the Battle of the Atlantic.
Understanding the wrecks’ current condition is a crucial first step in establishing efforts to preserve these historic sites, which serve as “time capsules from one of the darkest timesin the nation’s history,” Alberg said.
Scientists will use remote sensing technologies, including sidescan and multibeam sonar systems, in an attempt to locate several previously undiscovered WWII shipwrecks. NOAA and its expedition partners from the University of North Carolina will also deploy an advanced remotely operated vehicle to take high-definition imagery of these shipwrecks, LiveScience reported.
Among vessels will survey and photograph is the British armed trawler, HMT Bedfordshire. Bedfordshire was sunk by a torpedo fired from the German submarine U-558 on May 12, 1942, resulting in the loss of its entire crew.
The survey team will also study marine life found at the site which now serves as a vibrant artificial reef. Consistent with US and international policy, the shipwreck site is considered a war grave and will not be disturbed during the expedition.
UCI Medical Affiliates will have to restate its earnings reports for fiscal years 2002, 2003, 2004, 2005 and 2007 as a result of the actions of the company’s former chief financial officer.
Last month, former UCI CFO Jerry F. Wells Jr. pled guilty in federal court to criminal charges for falsifying eight of the company’s periodic reports filed with the US Securities and Exchange Commission. He admitted to embezzling $2,967,382 between January 2003 and December 2008 from the Columbia, SC-based company.
UCI had already said that it expected to restate its earnings for the fiscal year ended Sept. 30, 2006, as a result of Wells’ actions.
In March, the company hired accounting firm Elliott Davis. In addition, UCI’s audit committee directed the company to re-evaluate its critical accounting policies and compliance, and it was determined that certain policies had not been applied properly, according to information filed with the US Securities and Exchange Commission:
Accordingly, on July 31, 2009, the Audit Committee determined that the Company’s previously issued financial statements for the fiscal years ended September 30, 2002, 2003, 2004, 2005 and 2007, and the related reports of the Company’s previous independent registered accounting firm and the unaudited condensed consolidated financial statements for each of the fiscal quarters during such years and the fiscal quarters in 2008, should no longer be relied upon and that such financial statements will require restatement. Similarly, related press releases and reports describing the Company’s financial results for the aforementioned periods should no longer be relied upon.
Wells embezzled from UCI by using the company’s corporate credit card to pay personal expenses, preparing false expense reports and submitting them for reimbursement and submitting fraudulent check requests for non business expenses, such as construction work on his personal residences and payments on personal credit card accounts, according to information filed with the SEC.
Wells’ misconduct was identified during an internal investigation conducted by the publicly traded company, beginning last December, after UCI’s former independent registered accounting firm reported certain suspicious transactions.
UCI stock is trading for $1.45 a share.